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We continue to see precious metals lead the way higher and this morning it sounds as if there is progress being made in South Africa and the strike affecting their mines. We would expect to see more of that in the years ahead, not just in South Africa, but worldwide. Although the mines are higher cost, the jurisdictions are fair and just, so we would advise to try and find producers in North America when at all possible. Sticking to friendly mining jurisdictions is another idea to stick to and especially those with a history of being open to foreign capital investing in their resources to turn a profit. In short, stay away from socialist regimes and populist leaders.

With the pullbacks we have seen across the board in the commodity space, we think that now is a good time to start adding to positions where we are off 5-10% already. There are a lot of good names out there which are on sale compared to where they were only two trading sessions ago.

Oil & Natural Gas

Kodiak Oil & Gas (NYSE:KOG) saw shares fall again yesterday with a $0.25 (2.60%) drop to close at $9.37/share as 5 million shares were traded. It was only in the last five sessions that the company was testing the $9.90/share level trying to breach it and failing, and in the past two days we have fallen sharply after that failure. Our view is that so long as shares can remain above the $9/share level then all should be fine here. Falling below that level would be cause for worry and we would have to look at advising an exit from the trade if that were to happen.

Uranium

Yesterday we discussed uranium and the need for investors to add exposure in 2013. Ironically the industry rose strongly as takeover rumors began to swirl and Denison Mines, Ltd (NYSEMKT:DNN) was a benefactor of this talk. The company's shares rose $0.27 (18.62%) to close at $1.72/share on volume of 13.8 million shares. The volume was many times higher than what is the average here and this reminded us of the good ol' days in the sector when 20% up days were normal. We would expect a pullback after this large run-up and if one wanted exposure to Denison we would wait until that happens and then buying.

Precious Metals

We watch a lot of names in the precious metals sector and yesterday we noticed one of them hitting new highs. Yamana Gold (NYSE:AUY) hit a new 52-week high during trading yesterday and finished quite near that level at the close. The company is a favorite of those trying to gain exposure to gold and has been a trader favorite for years. Gold has momentum right now, and so too does Yamana. We recommended investors pay attention here when the latest gold rally first began and would continue to hold it as we believe it will be one of the outperformers in the sector.

We would also like to point out the unusual volume at New Gold (NYSEMKT:NGD) which has seen unusual volume the past few trading sessions. The stock traded 5.2 million shares yesterday which is over twice the average volume for the company. Shares have been rising and over the past month are up over 16% during that time. As the stock rises it is accompanied by higher volume and the company is approaching its yearly highs. This is setting up much like Yamana when we made that recommendation not all that long ago.

We did recommend Silver Wheaton (NYSE:SLW) as a play on silver which we are bullish on, and in real terms more bullish on than gold to quantify that statement. After yesterday's rise of $0.63 (1.62%) to close at $39.55/share the stock is at levels not seen since March and is setting up to make a run at the highs set nearly a year ago. Silver has been quite strong lately and continues to be, with that said we think that unless the economy begins to pick up it could take a back seat to gold due to silver's status as an industrial metal as well as a precious metal. Due to that possibility, we like Silver Wheaton because it gives you a tax advantage over owning actual silver or silver ETFs and also pays you a 1% yield to sit still. Hard to argue with those numbers, which is why we remain bullish on Silver Wheaton.

Source: 5 Commodity Stocks Moving On News